Trade Fund set to Boost Regional Business Flow

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PTA bank has introduced a fund to boost regional business flow

PTA bank has introduced a fund to boost regional business flow

Expectations have heightened in the business community in the country after the Eastern and Southern African Trade and Development Bank (commonly known as PTA Bank) heightened the business expectation and GML Capital.

The project will establish an African-focused trade finance investment fund according to information unveiled by Importers and Exporters in the region. They believe this development will usher in more financing for their businesses.

“It will be an open-ended fund and will seek to provide secure and stable investment returns, uncorrelated with mainstream asset classes, while also pursuing social and development goals in Africa in reducing poverty and transferring financial expertise to entrepreneurs on the continent,” the firms indicated in a statement.

The new investment fund, which is expected to be open for subscriptions as from next year, will greatly support importers and exporters starting from the 18 African states where the PTA Bank currently operates.

The Bank’s customer base spans the Common Market for Eastern and Southern Africa (COMESA) trade bloc and includes Burundi, Comoros, Djibouti, the Republic of Congo, Egypt, Eritrea, Ethiopia, Kenya, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tanzania, Uganda, Zambia and Zimbabwe.

The air around this development is increasingly positive as both firms have extensive knowledge of the region and can now offer tailored innovative financing solutions to boost regional trading and development.

“This fund will make a significant contribution towards addressing the trade financing deficit in Eastern and Southern Africa.

It will also help leverage regional, international, private and public sources of capital and facilitate regional trade and economic integration that is in line with the mandate of PTA Bank,” said PTA Bank President, AdmassuTadesse in Kigali.

Mohammed Mazimpaka, Chairman of the Chamber of Commerce at the Private Sector Federation, believes the fund can enhance competitiveness in the investment financing segment, and boost overall socio-economic and environmental development.

“It will be an alternative source of funding for investors seeking long-term and affordable credit. In fact it’s timely, and will enable the private sector efforts to deliver the country’s economic development objectives,” he said.

The impact of imports and exports on a country’s balance of payments and overall economy are significant.

Positive net exports contribute to economic growth, therefore, countries are to aim for more exports as this would mean more output from, say, factories, more people employed to keep up with increasing output, more inflows into the economy which usually translates into consumer spending and further economic growth.

The trade fund is, therefore, a welcome development and one that should be replicated by other African regions as a sure means of stimulating further growth.

 

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About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

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